Is Micron Stock Too Cheap to Ignore?

Micron Technology has rallied 214% in 2026 yet trades at just 5.7x fiscal 2027 earnings, a steep discount to its 10-year average price-to-earnings ratio of 22. The memory chip maker is riding dual tailwinds: AI data center demand and ongoing supply shortages that continue to push pricing higher.

The valuation gap reflects investor caution over memory's notoriously cyclical boom-bust pattern. New production capacity scheduled to come online in 2027-2028 threatens to rebalance supply and demand, potentially pressuring the margins and pricing power that have fueled MU's recent surge.

If the stock were to revert to historical valuation norms, shares could double from current levels. That scenario hinges on whether AI-driven demand can absorb incoming supply without triggering the margin compression that has defined previous cycles.